Legal Library: Cases and Proceedings

The Commission challenged Lubrizol Corporation’s consummated 2007 acquisition of the oxidate assets of The Lockhart Company which had the effect of substantially lessening competition in the already highly concentrated U.S. market for chemical rust inhibitors. These inhibitors are commonly used to prevent rusting during the manufacture of metal products such as automobiles and other heavy equipment. According to the Commission’s complaint the acquisition removed Lubrizol’s last substantial competitor in the relevant market. In addition, the Commission challenged a non-compete agreement included in the terms of the acquisition which prevented Lockhart from competing in the relevant market for 5 years as anticompetitive because it restrained the ability of new firms to enter the market. The Commission issued a consent order remedying its anticompetitive concerns requiring the divestiture of the oxidate assets in question to Additives International and the elimination of the non-compete agreement.

The Commission challenged Getinge AB’s proposed $865 million acquisition of rival Datascope Corporation as anticompetitive in the market for endoscopic vessel harvesting devices (EVHs). EVHs are used during coronary artery bypass graft surgery where a vein is removed from a patients leg or arm to replace a damaged or blocked coronary artery. According to the Commission’s complaint, the acquisition as proposed would give Getinge nearly a 90% market share and the ability to unilaterally increase prices while reducing the likelihood of innovation. The Commission issued a consent order requiring that Datascope divest its EVH assets to Sorin Group USA within 10 days of consummating the transaction.

In November 2008, the Commission issued an administrative complaint charging that the acquisition of CCC Information Services by Mitchell International, a transaction valued at $1.4 billion, would be anticompetitive in the market for “estimatics”, a database system used by auto insurers and repair shops to generate repair estimates for consumers. According to the complaint, the transaction would also harm competition in the market for total loss valuation (TLV) systems, used to inform consumers when their vehicle has been totaled. The transaction would create a new entity with well over half of the market share for these systems, allowing for unilateral price increases, and facilitating coordination among the remaining smaller competitors in the market. The Commission concurrently authorized staff to file a complaint in Federal District Court. On March 9, 2009, the US District Court for the District of Columbia ordered a preliminary injunction and temporary restraining order preventing the parties from consummating the transaction pending a full administrative trial on the merits. On March 13, 2009, since the respondents announced that they decided not to proceed with the proposed merger the Commission dismissed the Administrative Complaint.

In November 2008, the Commission authorized staff to file a complaint in Federal District Court, charging that the acquisition of CCC Information Services by Mitchell International, a transaction valued at $1.4 billion, would be anticompetitive in the market for “estimatics”, a database system used by auto insurers and repair shops to generate repair estimates for consumers. According to the complaint, the transaction would also harm competition in the market for total loss valuation (TLV) systems, used to inform consumers when their vehicle has been totaled. The transaction would create a new entity with well over half of the market share for these systems, allowing for unilateral price increases, and facilitating coordination among the remaining smaller competitors in the market. The Commission concurrently issued an administrative complaint. On March 9, 2009, the US District Court for the District of Columbia ordered a preliminary injunction and temporary restraining order preventing the parties from consummating the transaction pending a full administrative trial on the merits. On March 13, 2009, since the respondents announced that they decided not to proceed with the proposed merger the Commission dismissed the Administrative Complaint.

The Commission charged that West Penn Multi-List, operator of the only MLS service for the Pittsburgh metropolitan area, unreasonablay restricted access to its MLS services, which restrained competition.  Specifically, West Penn’s MLS rules limited publication and marketing of the listing of sellers’ properties based solely on the terms of the seller’s listing contract with the real estate broker. The MLS provider limited MLS access to those brokers with a traditional full-time listing agreement with their seller, thus constraining the ability of brokers with non-traditional listing agreements to compete.  To settle the charges, West Penn agreed to a consent order which prohibits West Penn from adopting or enforcing rules that (1) require brokers to comply with the MLS form contract and submit copies of their listing contracts to the MLS, and that (2) discourage brokers and home sellers from contracting for services for terms of less than a year.

In December 2008, the Commission settled antitrust concerns raised by the proposed $8.9 billion acquisition of Barr Pharmaceuticals by Teva Pharmaceutical Industries. The proposed acquisition would have lessened competition in the markets for 17 commonly used generic medications including drugs used in the treatment of cancer, bacterial infections, diabetes, acid reflux, and depression as well as several varieties of oral contraceptives. According to the Commission’s complaint, the acquisition would have likely led to higher prices for consumers through the removal of one of only four competitors in each of these markets. The Commission’s consent agreement requires both Teva and Barr to sell assets in 29 U.S. markets to either Watson Pharmaceuticals or Qualitest Pharmaceuticals.

Enforcing the mandatory premerger notification filing provisions under the Hart-Scott-Rodino Antitrust Improvements Act, the Commission filed a complaint in Federal District Court charging ESL Partners and ZAM Holdings, two investment funds, with failing to make timely filings prior to making two acquisitions. The acquisitions in question were the purchase of blocks of AutoZone, Inc.’s shares in September and October of 2004. According to the Commission’s complaint, the acquisition met the filing threshold established in the HSR act, and thus was required to file. ESL and ZAM agreed to pay civil penalties of $525,000 and $275,000 respectively to settle the Commission’s charges.